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Andrew Carnegie: A Destitue Man to Billionaire Philanthropist

Updated on November 22, 2013
Andrew Carnegie
Andrew Carnegie | Source

Life as a Minor

[1835] Andrew Carnegie was a phenomenal man. He was born on November 25, 1835, in Dunfermline, Scotland, and spent the first 13 years of his life there.

[1848] When Andrew was thirteen, he and his parents, Margaret and William, decided to take their lives to Allegheny, Pennsylvania.

  • They migrated because their family was poor. His father was a hand-loom weaver, but business wasn't good at the time. They also suffered from widespread starvation.

[1848] When arriving to America, and at the mere age of 13, Andrew began work as a bobbin boy. His duty was to change spools of thread inside a local cotton mill. He did this for 12 hours a day, 6 days a week.

  • He got paid $1.20 a week, for 72 hours work-time
  • Andrew's father worked at a separate mill, but later earned money by weaving and peddling linens. His mother made money binding shoes.

Pennsylvania Railroad
Pennsylvania Railroad | Source

Andrew Carnegie's Career Begins

[1850] Andrew found a job as a telegraph messenger boy for the Pittsburgh Office of the Ohio Telegraph Company. Weekly, he made $2.50, but the job also came with the added benefit of free admission at the local theatre.

  • In less than a year, Andrew was promoted to the post of operator.
  • Andrew Carnegie was a hard worker. He often memorized the buildings and the faces of important people around town. These social skills allowed him to get connections in the city.
  • On Saturday nights, Andrew would visit the library of Colonel James Anderson. Carnegie would borrow books constantly, and had a passion for economic and cultural development books.

[1853] At the age of eighteen, Carnegie was hired by Thomas A. Scott as secretary/telegraph operator, at the Pennsylvania Railroad Company, making $4 a week.

  • Andrew was very ambitious, and an excellent worker. He flew threw the ranks and eventually became the superintendent of the Pennsylvania Division.
  • Carnegie learned much about management and cost control here. Also, he learned a lot from his boss, Thomas.

[1855] Carnegie was given an investment opportunity from Thomas Scott. He initially invested $500 into Adams Express, and it was secured by a mortgage his mother put on their home, which itself was worth $700. This investment opportunity was one that would change their lives. He began a steady growth into thousands.

  • Carnegie received shares in T.T. Woodruff's Sleeping Car Company, as a reward for holding shares that he bought off Scott.
  • The Civil War was going to be an opportune time for Carnegie's success. He'd soon start his journey to millions.

Andrew Carnegie
Andrew Carnegie | Source

Andrew Carnegie Is A Millionaire

[1860] Before the Civil War, Andrew Carnegie was still working with Thomas A. Scott as superintendent of the Pennsylvania Railroad. During this time, he merged T.T. Woodruff's company with George Pullman. Pullman was the inventor of the first sleeping car, and it was used for transportation involving distances over 500 feet. Merging these two businessmen provided a pretty penny for them, as well as Carnegie.

[1861] In the spring of 1861, Andrew Carnegie was appointed Superintendent of the Military Railways and the Union Government's telegraph lines in the east.

  • At this time Andrew's boss, Thomas, was the Assistant Secretary of War in charge of Military Transportation
  • Carnegie opened rail lines into Washington D.C. After the defeat of Union Forces at Bull Run, he supervised the transportation of the defeated forces. This rendered the telegraph service efficient for Union causes, and eventually helped lead to the victory of the Union.

[1864] At this time, Carnegie decided he was going to invest $40,000 into Story Farm on Oil Creek in Venango County, Pennsylvania. Petroleum from the oil wells sold well, and after one year, he received over $1,000,000 in cash dividends.

  • Since this was a time of war, there was a high demand for iron products; i.e. cannons, shells, and gunboats.
  • Carnegie, with the help of others, established a steel rolling mill, and control of the steel industry became the source of Andrew's bountiful fortune.

This picture shows the Bessemer Converter
This picture shows the Bessemer Converter | Source

Andrew Carnegie changes from Railroads to Ironworks

[1865] After the Civil War, Carnegie decided it was time to leave the railroad business. He would now focus all his energy on his iron trade. After helping develop several iron works, they would form The Keystone Bridge Works, and the Union Ironworks, located in Pittsburgh.

  • He still had close ties with Thomas A. Scott and the railroad company
  • He used this connection in order to receive contracts for the companies he ran, as he would produce the rails for the railroad company.

[1886] After Carnegie's mother passed away in 1886, Carnegie married Louise Whitfield, whom was more than 20 years younger then himself. In 1897, the happily married couple had their only child, Margaret. She was named after Carnegie's mother.

Andrew Carnegie Dominates the Steel Industry

[1886] Andrew's continuous reading and learning helped him develop the Bessemer Process for steel making. This greatly reduced the costs of manufacturing steel, and was much more efficient. Immediately after, the price of steel would drop due to Carnegie's findings.

  • Bessemer Steel was a big deal; it became used for railway lines, and girders for large buildings and bridge.
  • The second innovation Carnegie contributed was the use of vertical integration.

[1888] By this time, Carnegie Steel was the largest manufacturer of many things: pig iron, steel rails, and coke (fuel). He also purchased his rival's company, Homestead Steel Workers, which came with many benefits.

  • An extensive plant attributed to iron and coal fields
  • A 425-mile railway
  • A line of lake steamships

[1892] With the launch of the Carnegie Steel Company, Carnegie combined his assets with those of his associates, making his business even greater, and without a doubt, the greatest steel company in American History.

Carnegie's Empire consisted of:

  1. J. Edgar Thomson Steel Works
  2. Pittsburgh Bessemer Steel Works
  3. Lucy Furnaces
  4. Union Iron Mills
  5. Wilson, Walker, & County Iron Mill
  6. The Keystone Bridge Works
  7. Hartman Steel Works
  8. Frick Coke Company
  9. Scotia Ore Mines

Andrew Carnegie, at this time otherwise known as the Richest Man in the World.
Andrew Carnegie, at this time otherwise known as the Richest Man in the World. | Source

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Andrew Carnegie Sells His Company Shares; Becomes Billionaire

[1901] At this point, Carnegie was at the age of 66. He was considering retirement. Preparing for his end, he reformed all his enterprises into conventional joint stock corporations. John Pierpont Morgan was America's most important financial deal maker, and banker. He recorded Carnegie's success, and saw his techniques that improved profit. John saw a fortune in an integrated steel company that would cut costs, improve employee wages, and lower price of steel to consumers in the market.

  • In order to do this, John needed to buyout Carnegie, and other large influential steel owners at the time.
  • John and Andrew came to an agreement on March 2, 1901. Carnegie's share of capital from the sale was $225,639,000. (Presently, this amount of money is roughly $6,331,430,340.)
  • Carnegie received payment in the form of 5%, 50-year gold bonds. After selling his company, it was combined with others to form the United States Steel Corporation.

Carnegie did it. He was officially a multi-billionaire.

Andrew Carnegie's Skibo Castle located in Scotland
Andrew Carnegie's Skibo Castle located in Scotland | Source

Carnegie's Philanthropy

Carnegie, in his later years, would become a worldwide known name. He is still known to this day for his huge donations and philanthropy work. Just as he changed his own life, he changed the lives of millions. He mainly focused on providing capital for thoughts of public interest, as well as social and educational development.

  1. Carnegie bought Skibo Castle in Scotland, and used it as a home away from home. Otherwise, he resided in New York.
  2. Established libraries in the United States, Canada, Britain, as well as other english-speaking countries.
  3. Established the Peabody Institute in Baltimore, which within a decade was full of wings containing libraries and offered much to scholars.
  4. Opened the Carnegie Library in his hometown, Dunfermline.
  5. In 1885, Carnegie gave $500,000 to Pittsburgh in order to build a public library.
  6. In 1886, gave $250,000 to Allegheny City, in order to build a music hall and additionally, a library.
  7. In 1886, Carnegie also donated another $250,000 to Edinburgh for a free library. Altogether, he funded over 3,000 libraries across multiple english-speaking countries.
  8. In 1899, he donated £50,000 to help establish the University of Birmingham.
  9. In 1900, Carnegie donated $2 million to start the Carnegie Institute of Technology in Pittsburgh. (CIT)
  10. In 1902, donated an additional $2 million to establish the Carnegie Institution, located in Washington D.C.
  11. Additionally donated $10 million+ to these schools within the span of the rest of his life
  12. In 1901, he gave $10 million to start the Carnegie Trust for the Universities of Scotland. This provided money to many universities and helped expand scientific research within these schools.
  13. He donated large sums to Dunfermline, his hometown. Additionally, he established the Carnegie Dunfermline Trust, to benefit the people of this city. A statue now stands to honor him.
  14. In 1913, he donated another $10 million towards the Carnegie United Kingdom Trust.
  15. Funded construction of over 7,000 church organs. He greatly appreciated music.
  16. Donated $150,000 for a Pan-American Palace in Washington
  17. Opened pension funds for former employees and professors.
  18. Opened a safe where most of his fortune was stored.

Among these things, Carnegie donated much to education, and the prevention of imperialism. He just loved helping others.

The Death of Andrew Carnegie

Andrew Carnegie passed away at the age of 83 on August 11, 1919. The cause of his death was bronchial pneumonia. He died in Lenox, Massachusetts,

By this time, Carnegie had donated $350,695,653. (Presently $4.8 billion.) He was buried at the Sleepy Hollow Cemetery, located in North Tarrytown, New York. At the time of his death, his last $30,000,000 was given to foundations and charities that Carnegie supported.

Andrew Carnegie was a phenomenal man. Throughout his life, he accomplished many feats, and for a point, controlled the steel industry. He was hard-working and self-motivated. Carnegie had a passion for literature and learning. He is a man that dedicated his amass fortune to the needs, education, and advancement of the world.

Carnegie is a name we will never forget, with a respect that will never die.

11/25/35 ~ 8/11/19


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    • Mel Carriere profile image

      Mel Carriere 4 years ago from San Diego California

      Truly a remarkable life. Thanks for sharing the details of the life of this enlightened man. Great hub!

    • Inutero profile image

      Andrew Nuske 4 years ago from Ohio

      Thank you for the feedback Cheeky! I read a book on him a year ago, and he became my favorite businessman. Thank you for the follow, I returned the favor :)

    • Cheeky Girl profile image

      Cassandra Mantis 4 years ago from UK and Nerujenia

      Read the Book "Think and Grow Rich" by Napoleon Hill. It echoes much of what is already here. Carnegie was an amazing man I read about when I was a kid, and he blew my mind. That one broke Scot could travel from poverty to riches beyond all imaginings... it was beyond my own imagining. It laughed at the poor lepers in my head, and I swore I would never be poor.

      Great Hub! Going to tweet this one! Cheers!

    • Sherry Hewins profile image

      Sherry Hewins 4 years ago from Sierra Foothills, CA

      An interesting story about an interesting man.